Moments after Vodafone Idea announced that it would be hiking tariffs from December 1, Bharti Airtel also announced the same.
In a statement, the company said “it would balance the needs of the company to remain viable and thereby continue to invest in the much needed digital infrastructure and maintain the quality standards required by our customers.”
It further added that the telecom sector is highly capital intensive and constantly changing technology, which requires continuous investment. “It is, therefore, extremely important that the industry remains viable to support the vision of Digital India,” the company stated.
Airtel and Vodafone Idea had posted a combined loss of Rs 74,000 crore in Q2 by provisioning for the AGR pending dues. Bharti Airtel reported a consolidated net loss of Rs 23,044.9 crore in Q2, against a loss of Rs 2,866 crore in the previous quarter, on provisions towards Adjusted Gross Revenue (AGR).
The company’s shares surged 20% from Friday and hit a 21-month high of Rs 420 on Monday.
It was up 7% on the BSE on Monday. Most brokerages reportedly maintained a bullish stance based on strong operating performance in Q2.
In its statement, Airtel further added: “We understand that TRAI is likely to initiate a consultation for bringing rationality in pricing in the Indian mobile sector which has been operating at prices that have been eroding the viability of the sector.”
There may be some glimmer of relief for the telco, with the government exploring minimum price for calls and data to prevent extreme low or free tariffs.
The committee of secretaries (CoS) currently looking into sectoral levies is exploring setting a minimum price for mobile calls and data as per officials. The CoS has sought committee recommendations from the Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players on both voice and data and also assessing the impact it will have on telecom operators.
As earlier reported by the Economic Times, the Department of Telecommunications estimated that an increase of 10% in phone bills will get the sector about Rs 35,000 crore over three years, without affecting demand.
With IANS inputs